Steve, your heartfelt attempt to defend your wrongful claims about the “intrinsic value of gold” was troubled by errors of fact. If an “Austrian” economist said that gold has intrinsic value, it was not Ludwig von Mises.
Value is not intrinsic, it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment. Neither is value in words and in doctrines. It is reflected in human conduct. (Human Action, Scholars Ed. page 96. https://mises.org/system/tdf/Human%20Action_3.pdf)
An inveterate fallacy asserted that things and services exchanged are of equal value. Value was considered as objective, as an intrinsic quality inherent in things and not merely as the expression of various people's eagerness to acquire them. People, it was assumed, first established the magnitude of value proper to goods and services by an act of measurement and then proceeded to barter them against quantities of goods and services of the same amount of value. This fallacy frustrated Aristotle's approach to economic problems …
The basis of modern economics is the cognition that it is precisely the disparity in the value attached to the objects exchanged that results in their being exchanged. People buy and sell only because they appraise the things given up less than those received. Thus the notion of a measurement of value is vain.
It would be easy to pounce on that last sentence. When we exchange, it is specifically because of a prior measurement of value. We measure value many ways. A handwritten Thank You note is valuable to the recipient because it is evidence of the time you invest in the relationship. Keeping only to money, though, it is a measure of value. But I accept that LvM could not discuss economics like one of Tolkein’s Ents, all morning to say say “Good morning” in all of its contexts and nuances. In the context of HA cited above, LvM is correct.
LvM also could be accused of misusing the word “objective” when he wrote: “Value was considered as objective, as an intrinsic quality inherent in things …” He meant, of course, the first level of “objective” as “existing outside of the observer.” Ayn Rand had much more to say about the meanings of “objective.” LvM was correct: value does not exist within things, but within us.
Rand cautioned vehemently against the dangers of beginning the investigation with the axiom of subjective values.
I do not know where you get the idea that I dislike gold (or antimony or samarium). In point of fact, I bought my first gold coin, a British sovereign in 1971. I would have done it five years earlier, when I first read Atlas Shrugged, but I did not know enough about the numismatic markets. It is true that on my blog is an essay, "Mere Gold is Not Enough: Hayek's Denationalisation" about competing currencies.
Brilliant as she was, Ayn Rand did not solve all of the problems associated with the nature of money. See my essay, “Objectivism and the Gold Standard.”
We all know why gold ascended as the preferred money for large-scale, wholesale, and international trade. We tend to forget the fact that silver was the preferred medium for daily commerce. The facts of history deliver deep lessons to anyone with an open mind. It seems that the Comstock Lode of Nevada held more silver than was known in the entire world up to that point. The price of silver plummeted because of the volume of new supply. This is a well-known story.
On the other hand, I do not know any narratives about the consequence of the rich strikes of gold in California, South Africa, Australia, and Alaska. They seemed to have been not so disruptive. But I do not know.
But I do know that gold is not intrinsically valuable because the word “value” presupposes two questions: To whom? For what? (At least, that is what Ayn Rand said. Maybe Steve has a better insight to offer.)
(Edited by Michael E. Marotta on 8/12, 4:23am)